• OSP Home
• About OSP
• Databases & Quick Information
• Find Funding
• Find Funding
  • Overview
  • American Recovery and Reinvestment Act Web Site
  • Virginia Tech Expertise Database
  • Limited Submissions
  • Funding Opportunities Database
• Apply
• Apply
  • Proposal Overview
  • Notification of Intent
  • Budget Preparation
  • Submit
  • Award
  • Setup
  • Proposal Assistance Group
• Manage
• Manage
  • Introduction to Post Award
  • Financial Compliance
  • Project Modifications
  • Subwards
  • Nonfinancial Compliance
  • Project Completion & Closeout
• Contracts & Industry
• Forms
• Policies
• FAQ's
• OSP Feedback
• OSP Site Map

• Professional Development
• Research Statistics
• VTSPA

Office of Sponsored Programs

Subawards

For information related to the subaward process prior to project setup, please see the Pre Award section on subawards.

Subcontractor Selection:

1. Sponsor or Peer Reviewed
   If the subcontractor is specified in the proposal and the collaboration is funded, it is not necessary to comply with the procurement requirements for competitive bidding or sole source justification since the sponsor or peer review process already approved the selection.  Therefore, inclusion of a specific subcontractor in a proposal, and subsequent approval of that proposal as written, is an acceptable basis for sole source.  If this is not the case, you must comply with the following procedures for selection.
2. Non-Sponsor or Non-Peer Reviewed
   Normally, participation of a subcontractor has been fully disclosed and budgeted for in the University’s proposal submitted to the funding agency (sponsor).  However, when a subcontractor was not identified in Virginia Tech’s proposal, prior to entering into a subcontract arrangement, approval from the sponsor will be required.  In addition, it is the responsibility of the PI, along with the coordinated efforts of the Purchasing Department and OSP, to comply with procurement requirements in selecting a subcontractor.  There are two primary methods of selecting a subcontractor: competitive bidding or sole source procurement:
1. Competitive bidding requires the PI to solicit proposals from a number of sources and make a final selection from those responding based on technical merit and cost objectives.  The final selection is normally the lowest bid from a technically qualified offeror.
2. Sole source procurement may only be used when the nature of the program requires performance from a single entity because requisite services or expertise are not available from other sources.  The PI is required to provide sole source justification identifying the need for the particular services and why the selected subcontractor is the only source available.  Sole source selection is not justified simply by the fact that there has been ongoing collaboration between scientists.  A sole source justification in these situations must be further justified with respect to the unavailability of the services or expertise from other sources.  

---

Preparing the Subcontract at the Post Award Stage:

When OSP receives a fully executed award from the prime sponsor that includes a subcontractor, a “Request to Issue a Subcontract” form will be sent to the PI.  The PI is responsible for completing the form and returning the form to OSP.  The information on this form is necessary for OSP to ensure that the subcontract is properly written.  OSP cannot start preparing the subcontract until this form is completed and returned. 

OSP will check the list of debarred and suspended (excluded) parties (EPLS) on the web and conduct a Visual Compliance check (restricted parties or denied parties screening).  Individuals on the list of EPLS are not permitted to receive Federal contracts or assistance.  As a result, Virginia Tech will not be able to issue a subcontract to this individual/organization regardless of the type of award.  By law, people and institutions in the U.S. are not allowed to deal with individuals/organizations on the restricted parties or denied parties list.

OSP is responsible for preparing and executing all subcontracts related to sponsored programs.  A subcontract must incorporate all terms and conditions required by the prime grant or contract.  A subcontractor is not authorized to being work until a subcontract has been fully executed by an authorized representative from Virginia Tech and the subcontracting organization. 

The subcontracts will be issued as either cost reimbursement or firm fixed price based upon the scope of work.

1. Cost reimbursement is the most common subcontract issued by Virginia Tech.  A cost reimbursement subcontract is suitable when the work to be performed cannot be described in highly quantitative terms or when neither party to the subcontract can estimate its cost with confidence.  A cost reimbursement subcontract establishes an estimate of total cost for the purpose of obligating funds and establishes a ceiling that the subcontractor may not exceed (except at its own risk) without the prior approval from the prime recipient and the sponsor.  The subcontractor is reimbursed for actual costs as long as the costs were expended on goods and services that fall within the subcontract’s scope of work and are allowable costs.  
2. A firm fixed price subcontract is suitable when the services or goods can be adequately described and later measured in unambiguous terms.  The subcontractor is awarded a set lump-sum payment for performance of a specified set of tasks or delivery of a certain number of products or services.  The lump sum may not be adjusted, no matter what costs the subcontractor actually incurs.  In short, the subcontractor is at risk to perform, and the recipient (Virginia Tech) is guaranteed a certain level of performance at no risk of spending more than budgeted.

Once the subcontract is prepared, the unsigned subcontract is sent to the subcontractor for review.  The subcontractor may want to negotiate changes or request clarification of the terms and conditions; OSP will negotiate and coordinate those changes with legal counsel, department personnel and or the PI, where appropriate.  Once negotiations are completed and the signed subcontract is received, OSP executes the agreement on behalf of Virginia Tech.  OSP will send one fully executed copy to the subcontractor, the PI, and the Department’s Business Manager. 

Preparing and negotiating the terms and conditions of a subcontract takes time and OSP will move out expeditiously.  The length of time required to establish a subcontract will vary depending on how responsive individuals are to requests for information/data and the extent of negotiations required.  However, it is important to remember that the final subcontract should always serve to facilitate the completion of the funded project within the legal and regulatory limitation imposed by all parties involved.